(The author is a Reuters contributor. The opinions expressed
are her own.)
By Amy Feldman
NEW YORK, June 27 Jennifer Cole-Ruiz, a chef who
recently opened La Mujer Gala tapas restaurant in Brooklyn with
her wife, Madelein Ruiz, on Wednesday night planned to celebrate
the historic U.S. Supreme Court decisions in support of same-sex
marriage with a glass of cava after their customers had gone
The high court's landmark decision on Wednesday forces the
federal government to recognize same-sex marriages, like that of
Cole-Ruiz and Ruiz. The ruling also equalizes
how same-sex couples, whose marriages are recognized by their
states, will be treated for tax purposes.
Yet thorny issues remain for those who live in states that
do not recognize same-sex marriages. Currently, 13 states plus
the District of Columbia allow same-sex marriages, while the
remaining 37 do not.
"It's not a 100-percent win," says Jane Bernardini, a tax
partner at Anchin, Block & Anchin in New York. "It's a win for
people who live in states that recognize their marriages."
Cole-Ruiz, 48, expects the ruling, which overturned key
provisions of the Defense of Marriage Act (DOMA), will also help
them financially by lowering taxes and extending them benefits
as the married owners of a business.
"It's going to make a huge difference for my wife and me,"
For tax purposes, the ruling means that Cole-Ruiz and Ruiz,
along with some 114,000 gay and lesbian couples who are already
legally married, can now claim the same spousal tax benefits
that straight married couples do.
Filing joint tax returns as a married couple is the most
far-reaching financial change, while the ability to leave assets
to a spouse at death without owing federal taxes will alter the
planning of wealthy couples and business owners.
Accountants say they have already begun to work on amended
income tax returns for same-sex clients and that some should get
refunds. Same-sex widows and widowers - who like plaintiff Edith
Windsor, were required to pay federal estate taxes due solely to
the lack of federal recognition of their marriages - may also be
able to file amended returns to get that money back. Wednesday's
ruling clears the way for Windsor to claim a $363,053 tax
refund, plus interest.
For income-tax purposes, the financial impact of the Supreme
Court's decision will vary. In general, couples in which one
spouse earns a lot and the other a little will get a tax
benefit. For high-earning, dual-income couples, the change is
likely to cost them more in taxes due to the so-called marriage
But there are additional tax benefits when you claim married
status. For example, same-sex couples with children will have an
easier time claiming dependents on tax returns as well as
getting a host of other tax benefits for their kids.
And couples that have been required to pay income tax on
health benefits they received for a spouse can now avoid paying
those taxes, which is a significant savings.
"There may be some surprises for couples the first time they
file jointly," says Shari Levitan, a partner at Holland & Knight
LESS COMPLEXITY, LESS COST
David Landis, chief executive of San Francisco public
relations firm Landis Communication, says he almost doesn't care
about whether he gains or loses financially; he is just
overjoyed that his marriage to Sean Dowdall is recognized.
On a practical level, however, Landis, 56, figures the
ruling will simplify their taxes and drastically lower the fees
they pay to their accountant.
"We've been paying our accountant two or three times the
amount of money straight couples were paying," Landis says.
That is because state tax returns are calculated off the
federal one, but same-sex couples who have not been able to file
federally as married first had to create dummy tax returns in
which they were.
Since their federal and state forms did not match, Landis
said the Internal Revenue Service would routinely come back with
"Every year, we would get a notice from the IRS because they
didn't understand how this all worked," Landis said.
Those same-sex couples who had applied for extensions on
filing last year's federal tax returns can now do so with
clarity. Others may want to amend past returns in order to claim
their married status.
Typically, it is possible to amend a return for three years,
but some couples had filed so-called protective claims in order
to retain their ability to claim a refund beyond the statute of
limitations if the court ruled against DOMA.
Anchin's Bernardini is looking at filing back tax returns
for all same-sex couples who live in states that recognize their
marriages. She expects some to get big refunds.
"It could be a difference of $10,000 per year," she says.
"It's not everybody, but it could be sizable."
The estate-tax rules allow married couples to pass an
unlimited amount of assets from the deceased spouse to the
surviving one without owing tax. With yesterday's ruling, gay
and lesbian couples can do the same.
Married couples are able to leave as much as $10.5 million,
free of federal estate taxes, to their heirs. That benefit also
now applies to same-sex couples.
Same-sex widows and widowers who had previously paid estate
taxes on assets they received from a deceased spouse within the
past three years can now go back and file an amended estate tax
return to claim a refund.
Gail Horowitz, an attorney at the Wade Horowitz LaPointe law
firm in Brookline, Massachusetts, says she's doing just that for
a man whose husband died in 2009, leaving him substantial
"We filed an appeal on it very quickly and hope that means
he will get a refund now," Horowitz says.
Horowitz also says she knows a couple that hopes to get a
$50,000 refund from amended tax returns. "You are paying for the
party to celebrate," she told them.
(Editing by Lauren Young and Gary Crosse)